Looking for the perfect home isn’t always easy, but with the right preparation, it can turn out to be an easy, stress-free experience. One of the best ways to prepare for the home buying process is to make sure your finances are in order.
Here are a few things to consider before you begin your home search:
- Buying vs. Renting
Always think ahead – what are your plans for the next five years or so?
In case you’ll be moving from place to place, then it might make more financial sense to rent. But if you’re planning on staying put for a longer period, then buying might be a much better option.
- Crunch the Numbers
Knowing your budget before looking for a home is always a smart move.
A good rule of thumb is not allowing your mortgage and fees such as taxes, maintenance costs, and other required payments to exceed 28% of your monthly income.
- Review Your Credit Report
A good credit rating will allow you to secure a loan. In case your credit is subpar, don’t worry – you can do things that will get you back to good standing. Keep in mind that it may take you up to a year, so be sure to avoid quick fixes. You can start by not maxing out your card and paying all your bills on time.
- Do Your Research
What’s your highest priority? Is it a good school district? Neighborhoods with a low crime rate? Convenient access to public transportation? These are some of the things you should think about before planning your purchase. The same factors that attracted you to the property could also increase its value when you eventually decide to resell.
- Seek Professional Advice
During the home buying process, you can rely on real estate agents and finance experts to give you sound advice. Be sure to consult them in case you’re unsure of anything.